Canada’s beer industry will be hit with a $330-million increase to the annual cost of cans if U.S. President Donald Trump refuses to back down from the 25-per-cent tariff he slapped on Canada’s aluminum industry last week.
Aluminum beer cans are currently subject to double tariffs, with the United States imposing a 25-per-cent tariff on raw aluminum imports last week, and the Canadian government levying a 25-per-cent tariff on $30-billion worth of goods imported from the U.S. – including finished beer cans or flattened sheets of aluminum that can be made into cans.
For Canadian breweries, the tariffs by both governments mean the cost of doing business will surge owing to the number of border crossings their cans make before hitting store shelves. Beer Canada president CJ Hélie says tariffs will cost his industry an additional $330-million a year.
“This is a universal concern among every brewer in the country right now,” said Mr. Hélie, whose association has 50 members who account for 90 per cent of all domestic beer brewed in the country. “Canada used to primarily be a refillable [glass] bottle market, and over the last few decades the market has converted to primarily be an aluminum can market.”
Today, 85 per cent of packaged beer in Canada is sold in cans, many sourced from a handful of major manufacturers in the U.S.
Last year, Canada exported more than $10.6-billion worth of unwrought – meaning minimally processed – aluminum to the U.S., which was Canada’s top export market for the product by a long shot.
In 2024, Canadian brewers used about 3.7 billion cans, of which almost 20 per cent were American-made. Although Canada is the source for much of the raw aluminum that is later used to make beer cans of all sizes, its manufacturing capacity sorely lacks key tooling components widely available in the U.S.
Mr. Hélie said Canada does not operate any aluminum rolling mills: facilities that produce large, flat sheets of aluminum that are then cut and formed into aluminum beverage cans.
This interdependence between the two countries means a can is likely to cross the border at least twice on its journey from mine to six-pack, so consumers paying for the final product could see the trickle-down effect of a double tariff.
Erich Schmidt, a spokesperson for the Canadian Beverage Association, said there are two principal suppliers for aluminum cans in the non-alcoholic market. Both of those companies have manufacturing facilities in Canada, but the aluminum sheets and lids come from the U.S.
Mr. Schmidt, whose association represents 90 per cent of the non-alcoholic beverage producers in Canada, declined to comment on how much tariffs could add to the price of cans for the sector, but said as “aluminum prices rise, so does the cost of aluminum beverage containers.”
At Superflux Beer Co. in Vancouver, the specialty brews are served in U.S.-made cans. “Every craft brewery in Canada that you can buy a 16-ounce (473-millilitre) can from, those cans are not made in Canada,” co-founder Adam Henderson said.
Canadian manufacturers exist for certain sizes of cans, Mr. Henderson says, but their supply is spoken for by brands much larger than his.
Owing to his brewery’s size, Mr. Henderson said he has to go through a Canadian distributor to buy his tallboy cans, which are made almost exclusively by manufacturers in the U.S.
“It’s not just that we can’t get cans, but it’s also, as an industry, we’ve been facing a squeeze,” he said.
Toronto-based craft brewer Steam Whistle Brewing Co. said its 16-oz. tallboy can has become the container of choice among customers. But no Canadian manufacturers make those cans, so the company says it could see $1-million in additional annual costs if the trade war bleeds into the busy summer beer season.
Steam Whistle president Bromlyn Bethune said the company was lucky enough to stockpile three months’ worth of pretariff priced inventory. However, she has already been notified by its lid supplier that the next invoice will include tariff-affected prices.
“As a craft brewer, this is extremely challenging,” she said.
Beer Canada’s Mr. Hélie says many small breweries couldn’t stockpile because of a lack of storage space and cash flow, leaving them vulnerable to tariff pricing. The price of aluminum has already jumped almost 80 per cent since January, he added.
Ms. Bethune says increasing the price of a six pack is out of the question, particularly for Steam Whistle, which is already a high-end premium craft beer.
“We don’t want to outprice ourselves on the market during a time when consumers are going to be feeling this all around them.”
To mitigate costs, Steam Whistle and other breweries want to eliminate interprovincial trade barriers, and have asked the Ontario government to re-examine the taxes paid by craft brewers in the province, which Ms. Bethune said are among the highest in the country.
Steam Whistle pays $5-million more a year in provincial tax than a brewery of the equivalent size in Quebec, she said.
“And as a craft brewer, we believe Canadian products should be taxed evenly and fairly across the country when we’re all dealing with what’s coming at us as businesses,” Ms. Bethune added.
Mr. Hélie is hoping the industry will recoup some of its losses if Ottawa returns a portion of what it receives in countertariffs, as it did in 2018, when Mr. Trump imposed a 10-per-cent aluminum tariff.
Supply chains for cider and wine are being sucked into the same tariff trap, and producers also want Ottawa to help.
John Boynton, president and chief executive officer of Arterra Wines Canada, which owns and distributes more than 100 brands, including Growers Cider, and Jackson-Triggs and Open wines, said the cans and bottles used to package these products are made in the U.S.
He said the tariffs affecting canned products have left him in an impossible situation, and he fears bottles could be next. “It’s too big of a number to absorb,” he said.
Shifting his supply chain isn’t a viable option because of the limited number of manufacturers and the time it takes to test out new packaging for products, he said.
For now, his plan involves talking to suppliers and calling on the government for an exemption. Like Steam Whistle, passing on the cost to consumers is out of the question.
“What we’re telling everybody is hold the line on costs. No increases in costs any more. We don’t think consumers can take it.”
